Small-business owners tend to earn less than they would as full-time employees, but most of them prefer entrepreneurship for its nonmonetary rewards and thus don’t mind taking a pay cut to engage in such ventures. This original research by macroeconomists Erik G. Hurst and Benjamin W. Pugsley explores this mind-set and its implications for policy makers looking to stimulate employment and innovation through small-business subsidies. While informative, the report is a heavily technical read intended for a professional audience. Nonetheless, getAbstract recommends it to government policy makers and economists, as well as to entrepreneurs.
In this summary, you will learn
- What motivates the small-business owner,
- How government policies aimed at this niche may not be optimal and
- What impact the small-business owner’s mind-set has on the overall economy.
About the Authors
Erik G. Hurst is an economics professor at the University of Chicago, and Benjamin W. Pugsley is an economist at the Federal Reserve Bank of New York.